Dive Brief:
- Parcel carrier OnTrac has launched delivery coverage in Chicago and other major Midwest markets, bringing 17 million additional consumers within its reach, according to a July 25 news release.
- Beyond Chicago, OnTrac has expanded into into Wisconsin (Madison and Milwaukee), Minnesota (Minneapolis and St. Paul) and Missouri (St. Louis). OnTrac now reaches 70% of the U.S. population, according to the company, delivering to 35 states and Washington, D.C.
- “We chose to expand to Chicago and the Midwest based on overwhelming customer feedback for a proven alternative carrier with our speed, cost-savings, service, and scale," Josh Dinneen, OnTrac's chief commercial officer, said in the release.
Dive Insight:
OnTrac has eyed major Midwest markets for quite some time. Dinneen told Supply Chain Dive last year that the Chicago area would be OnTrac's next launch, but it needed to find a facility in the region large enough to support its operations.
Now, the company has a 334,000-square-foot sortation center in Romeoville, Illinois, to handle millions of Midwest deliveries, the release said. Packages originating from Chicago can reach other locations in its network within one to five days, according to OnTrac's website.
The growing parcel carrier will have to compete with FedEx, UPS and other delivery providers already established in the Midwest. Jitsu, Better Trucks and Pitney Bowes have all recently expanded their shipping services in Midwest markets.
However, OnTrac says it has distinct advantages over competitors. National carriers don't provide the cost savings and dedicated account manager support that OnTrac can, while regional delivery companies can't match its sizable U.S. coverage area, according to the carrier. OnTrac also launched seven-day delivery this year for most of its network, but experts are split on whether Saturday and Sunday delivery demand justifies the added operating costs.
OnTrac's expansion adds to the momentum that smaller parcel carriers have seen in recent years. Volume and revenue for carriers outside of FedEx, UPS, the U.S. Postal Service and Amazon grew by 28.5% and 32.5%, respectively, between 2022 and 2023, per the Pitney Bowes Parcel Shipping Index.
